December 29, 2017 / 4:27 AM / a year ago

PRECIOUS-Gold heading for best year since 2010

    * Spot gold has risen more than 12 pct in 2017
    * Weaker dollar, political worries lift gold this year
    * Palladium best precious performer in 2017, up 57 pct

 (Adds graphic, updates prices)
    By Sethuraman N R
    Dec 29 (Reuters) - Gold prices hit one-month highs on Friday
and were on track for their best year since 2010, driven higher
over the past 12 months mainly by a weaker dollar and safe-haven
buying prompted by global political uncertainties. 
    Spot gold        was up 0.1 percent at $1,295.45 an ounce at
0735 GMT, having hit its highest since Nov. 29 at $1,296.26.
    U.S. gold futures         were steady at $1,297.50 an ounce.
    Gold, which is also on track for its best month since
August, has benefited from technically-driven momentum as well
as the dollar downtrend, analysts said. 
    Spot gold has gained more than 1.7 percent so far this week,
heading for its third straight weekly rise, and added more than
12 percent for the year. 
    The dollar index is down more than 9 percent this year, set
for its biggest annual loss since 2003. That weakness has helped
lift gold almost 5 percent from a near five-month low of
$1,235.92 struck in mid-December.        
    Many investors had predicted the dollar would get a boost
from U.S. tax cuts, tighter central bank monetary policy and
strong growth rates in 2017. 
    The greenback hit its strongest in 14 years at the start of
2017 on hopes that newly elected U.S. President Donald Trump
would implement pro-growth, pro-inflation measures. 
    Instead, the currency has weakened on doubts Trump would
succeed in implementing some of the programmes he had
highlighted in his campaign. 
    "The fact that both the dollar and interest rates have been
heading lower ever since the tax bill has passed tells us that
investors may be seeing the measure as falling short in its
primary aim of spurring growth," INTL FCStone analyst Edward
Meir said. 
    "It remains to be seen what gold does from here as it
approaches key resistance between $1,300–$1,320," Meir said.
    "The weaker dollar could provide more upside fodder for the
precious metal going into the New Year, as could a modest wobble
in U.S. equity markets. But, the geopolitical backdrop looks
fairly tame and would not lend much support," Meir said.
    Gold as a safe-haven asset has been supported this year as
the United States, China and other world powers have worked to
contain North Korea's nuclear ambitions.             
    Among the precious metals, palladium has been the best
performer this year, rising more than 57 percent due to strong
demand from autocatalyst makers amid production shortages. 
    Spot palladium        rose 0.2 percent to $1,067.58 an ounce
on Friday, having hit its highest since February 2001 at $1,072
in the prior session. 
    Spot silver        fell 0.2 percent to $16.83 on Friday.
Prices hit their highest in over a month on Thursday at $16.88
an ounce. 
    Spot platinum        rose 0.3 percent to $926 on Friday,
after touching a more than three-week high in the previous
session at $927.50 an ounce.

 (Reporting by Nallur Sethuraman in BENGALURU; Editing by
Subhranshu Sahu and Tom Hogue)
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